In what has become a regular feature of the tax return season, HMRC reports that 2,828 self-assessment tax returns were filed on Christmas Day. That’s a tiny proportion of the 12 million or so people who have to file tax returns before the 31 January 2022 deadline. If the past is any guide to the future, then around 6 million people will be filing their tax returns in January.
If HMRC does not receive your tax return by 31 January, you will be charged a £100 penalty even if you don’t owe any tax. Further penalties will be charged if the return is more than three, six and 12 months late.
The threat of a penalty for late filing will concentrate most people’s minds. HMRC does what it can to help, publishing videos, guidance and help sheets. These can be accessed by searching ‘Self Assessment’ on GOV.UK. However, if you have not already filed your tax return, it’s unwise to leave it until the last minute. This is particularly important if you may need to use HMRC’s telephone helplines.
Service levels for these helplines are likely to be impaired by illness, reduced productivity and absences to assist with the vaccination booster programme.
While the Prime Minister has tasked ministers with developing contingency plans to minimise disruption to public services in the event of 10, 20 or 25 per cent workplace absences caused by high levels of Omicron cases, it would be unreasonable to expect HMRC to be able to maintain business as usual during January. You should not therefore assume you will receive rapid telephone support from HMRC, particularly with so many civil servants working from home.
Productivity when working from home
A recent report suggests that the home working experience for many civil servants has been relatively good, although there have clearly been some problems. Of those civil servants who participated, only 79.9 per cent agreed that their home environment enables them to work productively. This presumably leaves around one in five in a working environment that is hindering productivity.
Vaccination booster programme
HMRC resources to provide helpline support during January may also be depleted as some civil servants take leave to support the government’s vaccination booster programme. Top marks to HMRC personnel who are doing this, but they can only be in one place at a time.
Does all this guarantee that HMRC will postpone penalties for late tax returns, as they did on 25 January 2021? We think not. While the Cabinet continues its daily scrutiny of medical data, some experts are already suggesting that the impact of the Omicron variant is beginning to decline in certain sectors of the population. We also know that HMRC is scrutinising its own performance levels and tax return submission rates. If penalties are to be
It’s also worth remembering that, while penalties were postponed in 2021, the obligation to pay tax bills by 31 January was not. Some self-assessment taxpayers may feel worried or anxious about paying any tax owed by the deadline. If they cannot pay in full, it may be possible to set up a time-to-pay arrangement. We will be looking at these arrangements in more detail next week.